Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 15
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32Tools, high pressure washers and welding equipment
• Soil, peat, vermiculite or other plant medium
(see page 18) are other examples of repair equipment
• peat pots, pots and other growing containers for
on which farmers and ranchers must pay sales tax.
trees and plants
• seeds and seedlings
• burlap to protect the root ball
PEST CONTROL
• netting used to wrap a tree for transportation
Pest control is exempt when used on land devoted
Crates and packaging for the sale or transportation
to agricultural use, but is taxable for any other use.
of fruits or vegetables or the decorative pot wrapping,
bows, sacks, etc. used in the sale of these items are
You are buying bait to control the gopher population on
exempt if they are not returned to the orchard or nursery
your pasture land. Since this product is being used to
for reuse.
control pests on agricultural land, its purchase qualifies
for exemption as consumed in the production of an
Consumed in Production
agricultural product (crops or livestock). As a result, the
gopher bait is exempt from Kansas sales tax.
Fertilizers, fuel for smudge pots to keep frost from
fruit trees, fuels to heat a greenhouse growing plants
You purchase a pesticide to keep mice from entering
from seed, insecticides and water are consumed in the
an area where you store machinery and vehicles. Since
production of plants and trees.
this pest control product does not become a part of an
agricultural product produced and does not qualify as
farm equipment, it is taxable.
UTILITIES
G
R
: T
,
ENERAL
ULE
HE SALE OF NATURAL GAS
PLANT NURSERIES/
,
ELECTRICITY
HEAT AND WATER DELIVERED THROUGH
CHRISTMAS TREE FARMS
,
MAINS
LINES OR PIPES FOR GENERAL AGRICULTURAL USE
OR FOR NONCOMMERCIAL RESIDENTIAL USE IS NOT
. T
SUBJECT TO THE STATE SALES TAX
HE SALE OF NATURAL
The definition of farming and ranching was
,
(
)
GAS
ELECTRICITY AND HEAT
BUT NOT WATER
DELIVERED
expanded in 1995 to include the operation of a plant
,
THROUGH MAINS
LINES OF PIPES FOR AGRICULTURAL OR
nursery or Christmas tree farm. A nursery operation
(
/
RESIDENTIAL USE IS SUBJECT TO LOCAL
CITY AND
OR
)
.
is the planting, cultivating and harvesting of nursery or
COUNTY
SALES TAX
greenhouse products, or both, for sale or resale. The
Effective January 1, 2006 sales of water delivered
term Christmas tree operation includes the planting,
through mains, lines or pipes for agricultural or
cultivating and harvesting of Christmas trees and the
residential use is not subject to state or local sales tax.
sale or transportation of Christmas trees. (A greenhouse
When subject to sales tax, the rate that is due is the
is a location where plants are stored and maintained
rate in effect at the utility user’s location.
while being held for sale – see also page 8.)
Water used to clean dairy equipment
Machinery and Equipment
would not be subject to state or local sales
tax. Electricity used to light a dairy barn
The term Christmas tree machinery and equipment
would be subject only to the local sales
means the personal property actually and regularly used
tax in effect where the dairy is located.
in any Christmas tree operation. Specialized equipment
used by a nursery to transplant mature trees from the
Electricity, gas and water are also often consumed in
growing site is exempt machinery and equipment.
production (defined on page 9). In this capacity, the utility
is not subject to either the state or a local sales tax.
Passenger vehicles, trucks, truck tractors, trailers,
semitrailers or pole trailers are specifically listed as
Electricity used to pump water for the
equipment that is not exempt. However, lawn-type
irrigation of crops or electricity used to
trailers, gators and other small farm trailers may be
power an incubator at a turkey farm is
purchased by Christmas tree farmers and plant
exempt from both the state and local sales
nurseries without tax if they meet the requirements on
tax, as consumed in production.
page 16, Farm Trailers.
Sales Taxation of Electricity and Gas
Ingredient or Component Parts
How state and local sales tax applies to electricity,
Among the items a nursery or tree farm may purchase
gas, or heat delivered through mains, lines, or pipes is
without tax as ingredient or component parts are:
summarized in the following table.
15
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